Pension Funds - Removing from fund
Discussion
fourstardan said:
Do pension funds remove underperforming equity holding?
For example, a part of my portfolio has a firm 40% down this year, can/do they remove them?
What happens if they go down the toilet?
None of this is a problem for me, im just interested to know how it all works.
If a DC company pension and all of your portfolio “ lost “ 40% just before you were due the first payment under a Pension it might be a slight problem (!) but otherwise funds go up and down with regularity. For example, a part of my portfolio has a firm 40% down this year, can/do they remove them?
What happens if they go down the toilet?
None of this is a problem for me, im just interested to know how it all works.
Usually it should be the Trustees or the Managers they have appointed that run the portfolio.
40% is quite a drop if it’s just the ytd you are referencing.
It also depends on whether that fund with the drop makes up a meaningful percentage of the overall portfolio.
It depends on the type of fund.
If it's a passively managed fund (an index tracker) then the fund will aim to hold all companies in the index eg. FTSE100 regardless of how badly the share price performs. The contents of the index are updated every 3 months so some companies will replace others.
It it's an actively managed fund then the fund manager will select which companies to buy and sell based on broad criteria eg. only UK companies. Some managers may see a 40% price drop as an opportunity to buy more shares in a company they like.
In general most active fund managers find it hard to beat the performance of passive funds over long time periods which tells you a lot about how difficult it is to predict the future.
If it's a passively managed fund (an index tracker) then the fund will aim to hold all companies in the index eg. FTSE100 regardless of how badly the share price performs. The contents of the index are updated every 3 months so some companies will replace others.
It it's an actively managed fund then the fund manager will select which companies to buy and sell based on broad criteria eg. only UK companies. Some managers may see a 40% price drop as an opportunity to buy more shares in a company they like.
In general most active fund managers find it hard to beat the performance of passive funds over long time periods which tells you a lot about how difficult it is to predict the future.
Depends.
I decided to sell out of a lindsel train fund because they held carpet right for a stupidly long time despite it tanking and having no prospect of recovery.
I also got out of Woodford in good time for similar reasons.
Sometimes despite them being the professionals you need to make a personal decision and drop a fund which has significant holdings you don’t agree with.
The alternative is to hold a global tracker with 1000s of holdings but even then they can be relatively heavy (4% say) in each of the big US household name companies.
I decided to sell out of a lindsel train fund because they held carpet right for a stupidly long time despite it tanking and having no prospect of recovery.
I also got out of Woodford in good time for similar reasons.
Sometimes despite them being the professionals you need to make a personal decision and drop a fund which has significant holdings you don’t agree with.
The alternative is to hold a global tracker with 1000s of holdings but even then they can be relatively heavy (4% say) in each of the big US household name companies.
Im in the Aviva MyM My Future Growth (Pre-2025)
I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
fourstardan said:
Im in the Aviva MyM My Future Growth (Pre-2025)
I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
What part is down 40% this year ?I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
Tighnamara said:
What part is down 40% this year ?
I'm not seeing anything 40% down either. Remember that the percentage up/down figure is over the last 12 months, but doesn't tell you WHEN your fund bought that asset. So if something's 40% down this year but was only bought yesterday...
But yes, the fund managers will buy/sell assets to meet the funds objectives - the same way that you can switch funds *within* your pension to meet your objectives.
alscar said:
Usually it should be the Trustees or the Managers they have appointed that run the portfolio.
As above.The Trustees will get regular reports from their Investment Advisers about the performance of their different investments (Equities, Bonds, Private Credit, Infrastructure) usually against a benchmark. If any investment is consistently performing below the benchmark the Advisers suggest we rebalance the portfolio.
fourstardan said:
Im in the Aviva MyM My Future Growth (Pre-2025)
I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
40% down doesn't really sound right or make sense I'm 43 so got donkeys years yet but love to see my pot grow.
Holdings are on here https://markets.ft.com/data/funds/tearsheet/holdin...
What are you seeing and where?
Meh, it was 14 not 40 plus another (Diageo) down 27....still underperformed nethertheless.
https://markets.ft.com/data/funds/tearsheet/holdin...
https://markets.ft.com/data/funds/tearsheet/holdin...
fourstardan said:
Meh, it was 14 not 40 plus another (Diageo) down 27....still underperformed nethertheless.
https://markets.ft.com/data/funds/tearsheet/holdin...
Ah, Different fund. My point still stands - maybe they've recently bought them because - given the 27% fall - they think they're now undervalued? https://markets.ft.com/data/funds/tearsheet/holdin...
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